Tower Health denied tax exemptions for 3 hospitals

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A Chester County judge denied West Reading, Pa.-based Tower Health's bid to get property tax exemptions for three of its Pennsylvania hospitals, the Philadelphia Inquirer reported Oct. 19.

Tower Health sought property tax exemptions for Brandywine Hospital in Coatesville, Jennersville Hospital in West Grove and Phoenixville Hospital. The three hospitals are based in Chester County, just west of Philadelphia, and were acquired in 2017 from for-profit Franklin, Tenn.-based Community Health Systems. 

In the decision to deny tax exemptions, filed Oct. 14, Judge Jeffrey Sommer said operations at the three Tower Health facilities have become too similar to for-profit facilities.

Mr. Sommer cited several reasons the three hospitals shouldn't qualify for property-tax exemption, including that they don't provide enough uncompensated services, it works with many physicians at for-profit facilities and they don't operate free of profit motives due to its executive compensation structures.

The 44-page decision comes as a blow to nonprofit Tower Health, which is struggling financially. 

Tower Health told the Inquirer it plans to appeal the decision.

"Tower Health is disappointed in this ruling and will appeal based on what we believe are numerous factual and procedural errors, and a flawed legal analysis," Tower Health told the Inquirer. 

The Chester County decision comes a week after a Montgomery County, Pa., judge voted to approve Tower's application for a property tax exemption for Pottstown (Pa.) Hospital. 

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